On May 21, Adobe announced it was buying Magento for $1.68B to expand its reach in e-commerce. Magento is an e-commerce platform built on open source technology which provides online merchants with a flexible shopping cart system, as well as control over the look, content and functionality of their online store. The acquisition fills a big gap in Adobe’s Experience Cloud and e-commerce integrations.
From a B2B and B2C perspective, Adobe can now compete with large players in the SaaS space such as Salesforce and Squarespace by offering a full e-commerce solution through its sales, marketing, and CRM products. There will be some leg work as Magento primarily targeted SMBs, and Adobe is most likely looking towards the enterprise.
Salesforce has announced goals to reach $60 billion in annual revenue by 2034, and is already on pace to meet its goal of $10 billion in 2018.
Magento, which was founded in 2008 and sold in 2011 to eBay for $180 million, is often criticized for its non-agile code and difficult interface, so shifting towards an enterprise play makes sense. Magento has already attracted large partners like Canon, Rosetta Stone, and Coca Cola.
However, Adobe’s Creative Cloud products makes it a serious competitor for Squarespace now that designers and creatives can begin in Photoshop or Illustrator and end up with their own e-commerce site, all without leaving Adobe.
Since announcing future partnerships with Microsoft, experts are speculating that deeper relations between Adobe and Microsoft could be on the horizon as Microsoft is also missing an e-commerce solution to complete their customer engagement platform. As Adobe and Microsoft continue to battle against Salesforce, expect more collaborations between the two.